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Just over a third (35 per cent) of all home loan refinances were internal in the 12 months to March 2025. The other 65 per cent were refinanced with a different lender.
This is the highest portion since reporting began in 2020. The four-year average for internal refinancing was 30 per cent.
The data from Money.com.au also revealed that out of the 554,820 total loans refinanced in the year to March, 194,898 were refinanced with the same lender.
The market is currently in a “refinancing frenzy”, according to a recent Equifax report.
Investors drove the vast majority (80 per cent) of refinancing activity over the year to March 2025.
A major reason behind the increased numbers is borrowers anticipating further rate cuts as economic conditions ease.
With the appetite to refinance on the rise, Money.com.au’s general manager of lending, Jacob Overs, said lenders are ramping up efforts to retain existing customers.
“Sending a discharge form to your bank is like pulling the pin – it tells your bank you’re serious about leaving, and they’ll often come back with surprisingly aggressive retention offers, sometimes even better than what they’re offering new customers,” said Overs.
“If you play hardball and formally start the loan discharge process, your lender is far more motivated to offer their best rate than if you simply ask for a reprice.
“For some borrowers, it can make sense to stay with their current lender if they’re offered a competitive rate, especially if you could avoid refinancing fees, which can run into the hundreds, and the hassle of switching accounts and direct debits.”
There are some key considerations to keep an eye on that could help in refinancing current rates.
A low loan-to-value ratio (LVR) could help get a refinance: “If you’ve built up a good repayment history, your loan amount as a percentage of your property’s value will likely be lower than when you first took out your mortgage. As a result, you’ll be considered a lower-risk borrower – which means you’d qualify for a lower interest rate from your lender,” said Money.com.au.
“It’s worth noting that if your loan amount is under $150,000, lenders are typically less motivated to retain your business.”
Relaying intention to switch lenders could help in refinancing negotiations.
With interest rates falling, competition is heating up. Money.com.au said this could help give access to “behind-the-scenes pricing.”
Another avenue for securing a refinance is if a borrower has multiple loans with a lender.
“If you have multiple loans with the same lender like a home loan and an investment property loan, you may be in a stronger position to negotiate a better rate with your lender,” said Money.com.au.
Lenders are eager to retain customers, which can give borrowers the upper hand as market conditions shift with the lowering of interest rates.
It can pay to be proactive in exploring options, as it could save on loan repayments.
[Related: Refinancers driving increased mortgage demand]
